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Editorial

California budget breakdown

If the two sides can't get back to the negotiating table, neither Republicans nor Democrats will realize their goals — and the state will suffer.

March 31, 2011

On the campaign trail last year, Jerry Brown portrayed himself as the gubernatorial candidate best able to forge a bipartisan compromise to solve the state's fiscal problems. On Tuesday, however, Brown announced that he'd failed to reach a budget deal with Republicans despite weeks of negotiations. That's almost certainly a death knell for a key part of Brown's plan, which was to ask voters in June to raise about $12 billion by renewing a temporary increase in sales, income and vehicle taxes.

But Brown's agenda isn't the only one at risk. Unless lawmakers find a way to resuscitate the negotiations, Republicans will be hard pressed to obtain any of the fiscal or regulatory reforms they had sought in exchange for supporting the budget.

The state faces a budget gap of $26.6 billion over the next 15 months. The budget proposed by Democrats, based largely on Brown's blueprint, would have cut $12.5 billion — including large reductions in welfare, healthcare for the poor and higher education. But it also would have extended the tax increases to close most of the remaining gap, making it toxic to GOP lawmakers with fiercely anti-tax constituencies.

To put the tax extension on the ballot, Brown needed the support of at least four GOP legislators. For a while, he appeared to be closing in on a deal with a handful of Senate Republicans to trim spending on public-employee pensions, impose a firm but temporary cap on spending and make the California Environmental Quality Act less onerous to developers. But Republicans complained that they weren't making real progress, and their demands suddenly multiplied late last week when negotiations should have been coming to a close.

In retrospect, negotiations appear to have been undermined by several forces. Republicans couldn't settle on a negotiating team, let alone a manageable list of priorities. Brown's shuttle diplomacy between lawmakers from each party made it harder to forge agreements on the ambitious reforms, even though there was broad support for meaningful changes. Perhaps most important, Brown didn't lay out for voters just what an all-cuts budget would look like, which allowed opponents of the tax extensions to call for more cuts without having to defend the consequences.

The good news is that lawmakers have two months left to strike a budget deal before the next fiscal year starts July 1. It's a more complicated task, now that Brown's proposal for a June ballot measure is defunct. But if the governor talked more specifically about the cuts that would otherwise have to be made — including at least $2 billion in spending on K-12 education and 20,000 teachers' jobs — perhaps lawmakers would see that it isn't a real alternative.

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